Miscalculating movie release windows

Speaking of windows, Disney has touched off quite the firestorm in Europe over its plan to release “Alice in Wonderland” on Blu-ray and DVD just 12 weeks after its March 5 worldwide theatrical debut instead of the usual 16 to17 weeks. Holland’s National Board of Cinema Owners is up in arms, and has organized a boycott among that country’s four largest theater chains, representing some 80-85% of screens. Three top chains in the U.K. are threatening to follow suit, vowing to keep Tim Burton’s 3D extravaganza off 95% of the 3D screens in the realm unless Disney backs down.

Good luck with that. I don’t see Disney backing down on this one. It obviously picked this fight with theater owners now because it knows it has the leverage to win. “Alice in Wonderland” will be one of the biggest-grossing theatrical releases of the year, with or without wide distribution in The Netherlands, and it has “Toy Story 3” in the wings, which will be even bigger. In crude terms, the theaters currently threatening boycotts need Disney’s movies more than Disney needs their screens, and both sides know it (U.S. theater operators have more leverage, of course, which is why Disney apparently has cut some sort of deal with NATO that would let it “experiment” with windows on one or two movies a year so long as it doesn’t make a habit of it).

The real question is: why is Disney so intent on getting “Alice in Wonderland” out on DVD and Blu-ray so soon.

In an interview with CNBC last week, Disney CEO Bob Iger said the early “Alice” release would allow the studio to “put the video out before the doldrums of the summer and to put it out when the movie is very fresh in consumers’ minds.”

Earlier, however, in an earnings call with analysts, he hinted at a broader agenda:

And so we really feel that we need to be cautious in terms of the movie business overall, because of the pressure on that very, very important window. And that’s why, by the way, we’ve been in discussions about windowing with the exhibitors, because we feel that it’s really important for us to maintain a very healthy business on the exhibition side… and a very healthy business on the home video side, which we think is actually in the best interest of the theater owners. A healthy movie business is good for them. They want us investing in innovation, investing in higher quality content. And so mindful of what’s going on in the home video side, we feel that it’s time, on a case by case basis, movie by movie, to really take a look at how we’re windowing the home video product into the marketplace.

Iger may or may not actually believe that (I sort of doubt theater owners will see it that way) but in any case, he’s conflating two separate, and only partly related problems.

The theatrical window probably does need to shrink, for reasons having to do with piracy and with addressing consumers’ growing appetite for ubiquitous access. But the problems of the DVD/Blu-ray business go much deeper than that and aren’t going to be fixed by shortening the theatrical window.

As I noted previously, the primary reason people aren’t buying DVDs at the rate they used to is that the value proposition of paying $15-$20 to purchase one (let alone $25 for the Blu-ray) no longer computes for many consumers given their other options for those same dollars. That’s a function of price, functionality, convenience, expectations and consumer choice, far more than one of timing.

Changing the timing of the Blu-ray/DVD release may help boost DVD sales at the margins (“Alice in Wonderland” may indeed benefit from avoiding a July release date). But unless and until the studios grapple with the fundamental home video value proposition–which means addressing pricing, retail availability, content portability and a host of other factors they’re currently ignoring–they’re not going to change consumer behavior appreciably.

Warner Bros. is making the same mistake, by the way, in forcing a 28-day window on Redbox. Inconveniencing rental customers may boost sales at the margins, but it won’t change what made them rental customers in the first place.

The studios need to stop blaming other people for their problems and start fixing them.

Events

Judges on a federal appeals court on Thursday grilled the Department of Justice (DOJ) over its challenge to a lower court decision blessing the AT&T-Time Warner merger. Source: Judges grill DOJ over challenge to AT&T-Time Warner merger

Share this:

Netflix and Amazon view Europe as a key battleground, but a new local quota and pushback from traditional broadcasters present challenges. Source: Netflix, Amazon Face New Parameters and Challenges in Europe

Share this:

A media landscape prone to tectonic shifts is likely to feel a series of aftershocks once Democrats take control of the House. Source: Media mega-mergers under threat with Democrats controlling the House

Share this:

MoviePass CEO Mitch Lowe opens up about ticketing service’s tumultuous year and its plans to battle back from the brink. Source: MoviePass Announces New Pricing While Promising to Win Back Customers’ Trust

Share this:

Comcast Xfinity TV customers will be able to sync their accounts with Movies Anywhere in order to access their movie purchases from the Xfinity Digital Store alongside those from other digital retailers. Source: Digital movie collection app Movies Anywhere adds its first pay TV partner, Comcast

Share this:

Four months after Comcast announced it was integrating Amazon Prime Video, the app is finally rolling out to Comcast’s Xfinity platform nationwide. Source: Amazon Prime Video is finally coming to Comcast Xfinity

Share this:

The main issue of live streaming is that it potentially damages the broadcasters’ investment whereby the benefits of exclusive rights owed to them fail to tally with the expected output. Source: Digital Streaming: Snuffing The Life Out Of Live Sports On TV